After slow start, Albania and Kosovo look to potential as partners

Members
of the Kosovo Security Forces march during a celebration marking
the sixth anniversary of Kosovo's declared independance from
Serbia in PristinaThomson
Reuters

By Benet Koleka and Fatos Bytyci

TIRANA/PRISTINA (Reuters) - Shortly after Kosovo declared
independence from Serbia six years ago, neighboring Albania said
it would bequeath its Adriatic port of Shengjin to its landlocked
ethnic kin.

The port, nestled on a scenic bay, is "the closest to Kosovo,"
about 125 km (77 miles) away, a poster in the office of Shengjin
manager Gjovalin Tusha helpfully points out.

Albania's gesture meant much to majority-Albanian Kosovo as it
sought to forge a path independent of Serbia and the Western aid
and remittances that had propped it up since a 1998-99 war.

Tirana proposed that Pristina take over the running and
enlargement of the port as, in effect, its own outlet to the sea.
Little came of it and the trickle of Kosovo-bound goods through
the shallow wharf has failed to match the lofty talk.

"In 2013, merchandise processing for Kosovo businesses was at a
minimum, about 4,500 tons, or a ship and a half out of 126 to 130
ships," Tusha told Reuters in Shengjin.

Now a new drive is under way, spurred by a change of government
in Albania and the recession in Europe, which has seen a damaging
fall in the amount of money sent home by Albanian migrant workers
- a mainstay of both economies.

At stake is Kosovo's economic viability and possibly its
stability, with one of the youngest populations in Europe and a
labor market woefully unable to support it.

In January, the two governments met in Prizren, an old trading
town in Kosovo closely associated with ethnic solidarity as
Albanian leaders once pledged there, in late Ottoman times, to
protect Albanian lands from covetous Balkan neighbors.

Kosovo and Albania "should live in a joint market," Behgjet
Pacolli, Kosovo's deputy prime minister and a Swiss-made
millionaire, told Reuters. But ties of blood and language have
yet to be matched by legislation and initiatives, he conceded.

"People are trying to connect... But if you look at the law, at
the paperwork, nothing has changed. This is just a wish-list," he
said.

MEAGRE TRADE

The challenges are huge for the two small, impoverished countries
that dream of eventual European Union membership.

For decades, Albania was cut off from ethnic kin elsewhere in the
Balkans by its Stalinist ruler Enver Hoxha. Its borders flew open
with the chaotic arrival of democracy in the early 1990s, but war
in Yugoslavia again stymied cooperation.

Kosovo is one of seven states to emerge from ex-Yugoslavia. Each
of those states now faces similar incentives to integrate
economically and pool resources, though progress has been slow.

Despite the proximity, less than a third of Kosovo's sea-borne
imports arrive via Albania. Most come through Montenegro's port
of Bar and from Thessaloniki in Greece to the south.

Kosovo accounts for just 1 percent of Albanian imports and 8
percent of exports. Just 3 percent of Kosovo's imports come from
Albania and 11 percent of its exports go the other way.

A costly new four-lane highway, dubbed "The Nation's Road", now
links Tirana and Pristina, but there are none of the truck queues
usually seen at other Balkan border crossings.

"This road is working at just 10 percent of its full capacity,"
said Pacolli, one of the most vocal advocates of greater
integration. "Something has to change in our economic cooperation
to make that road serve the country's economy."

Energy production may show a way forward.

After four years of procrastination by the previous Albanian
government, the neighbors inked a deal in December to build a
400-kV transmission line linking their electricity grids.

The 75.4 million euro ($103 million) project, financed by a grant
from Germany and a loan from the German KfW development bank,
will allow the two countries to exchange electricity to maximize
the use of Albania's hydro-generated power in winter and Kosovo's
coal-fired electricity in drier weather.

Both suffer power shortages due to insufficient output, out-dated
grids and theft. The new line should be completed in just over
two years.

ENERGY, TOURISM, AGRICULTURE

Just an exchange of electricity at times of peak consumption "is
immensely helpful in integrating both economies much more than we
have seen so far," Jan-Peter Olters, the World Bank's
representative in Kosovo, told Reuters.

The tourism industry is looking at marketing the two countries
together, given easier access to the mountains of northern
Albania via Kosovo.

However, trade rows over import duties on potatoes in 2009 and
2011 have highlighted how short-term business needs can sometimes
trump long-term strategic cooperation.

When a Chinese delegation visited Shengjin last month, checking
out locations to build a port worth some 2.2 billion euros,
hackers traced to Kosovo attacked the port website, branding
their kin in Albania "traitors".

"They (Albanians and Kosovars) need to look on each other as
complementary, not as competitors or just collaborators," said
Ardian Civici, a professor of economics in Albania.

"Right now, the economic cooperation of Albania and Kosovo should
renounce political ... displays and break down the kind of
barriers that today may seem unbreakable."